British Land acquires

The British Land Company PLC has acquired 65 high quality freehold public houses from Spirit Group. The purchase price was £174 million, reflecting an initial yield of approximately 6.1%.

Spirit, the largest managed pub operator in the UK, will continue to occupy the properties on 30 year leases without a break and with annual rental uplifts reverting to open market rents from year 15.

British Land has considerable experience in investing in public houses, having owned a property investment company in partnership with Scottish & Newcastle for nearly ten years. This successful joint venture, financed mainly through bank borrowings, acquired 306 public houses let to Scottish & Newcastle, all but two of which have now been profitably sold.

British Land’s investment director, Bob Bowden, commented: “This acquisition increases the size of our leisure portfolio with high quality public houses at a higher average lot size than those we owned previously, and let to the leading pub operator. We expect to enjoy a long term relationship with Spirit and to be able to enhance the value of the assets in the longer term”.

Source: British Land

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